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Political Events and Economic Ideas

Political Events and Economic Ideas

Edited by Ingo Barens, Volker Caspari and Bertram Schefold

The influence of political developments on the evolution of economic thought is the main theme behind this book. As the authors reveal throughout the book, history has shown many times that political events can trigger the formulation of new economic conceptions that in turn influence the future economic development of a country.



Subjects: economics and finance, economic psychology, history of economic thought, political economy, politics and public policy, political economy


Wars are indisputably political events. The term ‘World War’ applied to the last two major conflicts is sufficient for considering World War I and World War II as turning points in the history of wars. Their economic dimension is evident. Indeed, their impact on public expenditures, international transfers, demographic trends and economic growth has been scrutinized at length. They gave rise to well-known debates among economists (see, for instance, Keynes, Rueff and Ohlin on reparations and German transfers for World War I). Alternative interpretations have also been proposed in retrospect from the available data (see Kuznets and Bairoch). Besides its economic consequences, warfare itself gives rise to new economic ideas. A link between wars and economic thought has not seriously been investigated. Such a connection is well demonstrated by World War I and World War II at their different stages, namely preparations, military engagements, negotiation processes. We propose to sketch out briefly some features of this puzzling relationship. Schematically, warfare and economic thought are related in two different ways. On the one hand, war situations as extreme cases reveal several properties of the economies which are more or less ignored by the analysts, even in their traditional domain (exchange, production, markets and organizations . . .). In analysing such properties, new economic ideas emerged. Furthermore, the management of war requires new conceptual frameworks from which some analytical tools have been used for economic understanding. Thus, they enlarge the classical corpus of economic concepts as, for example, strategies, deterrence...

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